Sunday, January 22nd, 2012: USD/JPY maintained the sideways even after breaking the previous range of 76.60 to 77.10 on both sides. The outlook remains neutral for USDJPY considering the price action and the strong psychological support and resistance levels of 75.00 and 80.00.
The break below the lows of Mid-November had indicated some increase in bearish sentiments but overall the way USDJPY has been moving leaves nothing much to say about it. With the current upward move, the first thing we would be watching is for a break over 76.36 (January 6th resistance) to expect further upward move. Even with that break we would expect a good resistance near 77.50 or a little above daily Ichimoku cloud’s lower edge resistance level. A break over that should take USDJPY towards 77.80 or the upper edge resistance of the daily Ichimoku cloud and then 78.22 and only a break above that will make us expect further upward gains towards 79.50.
On the downside any strong break below 76.60/76.55 would again bring frequent supports near 76.40, 76.20 and 76.00 because of the upcoming psychological level of 75.00 ranges. Overall on the downside a strong break below 75.80 and some sustained action below 75.80 would make us expect deeper movements.
This is not for the next week but overall we stay bearish for USDJPY for the longer-term basis at least till a firm break of 85.52 does not take place and this level becomes a support level instead of resistance. Also, the psychological support of 75.00 should prove to be quite strong and hence any downward move should not have a great momentum and should only be coming with frequent sideways moves. As mentioned during last weekend, if a break below 75.00 takes place then also we expect a strong support first near 74.80 and then over 74.20.
You may also check daily technical analysis of usd/jpy and the weekend usdjpy forecast at ForexAbode.com.
